OutServe-SLDN closes headquarters, reveals organization is bankrupt

April Heinze, the chair of the board of directors of the lead “gays in the military” organization, OutServe-SLDN, revealed last night that the organization is basically bankrupt, and that it will be closing down its Washington, DC headquarters on July 31.

Heinze explained in an email to the group’s several dozen Military Advisory Committee members that the board of directors would continue to offer a whittled-down version of OutServe-SLDN’s core services of assisting LGBT service members in need (more details on that here), and that it will continue to hold its annual leadership conference.

Allyson Robinson SLDN ED

Allyson Robinson,
outgoing executive director of OutServe-SLDN

The news comes after two weeks of confusion following the allegedly accidental leak of an email by then- board member Sue Fulton, proposing that the board meet to seek Executive Director Allyson Robinson’s resignation.

In the email, Fulton made clear that “this isn’t working out,” referring to Robinson’s tenure as ED.   (Fulton later claimed that she was attempting to save Robinson’s job by asking the board to let Robinson go in a few weeks, rather than immediately.)

The dire financial straits of OutServe-SLDN go a long way towards explaining the confusion of the past two weeks.

Initially, Robinson’s allies said nothing was wrong, and that it was all board co-chair Josh Seefried’s fault

Josh Seefried

Josh Seefried, former board co-chair

Initially, some, including several OutServe-SLDN chapter heads, had suggested that Robinson was being fired because she is transgender.  They have now backed away from that charge.

And as recently as yesterday, former board member Fulton, who resigned, allegedly in protest over the fact that the board was considering removing Robinson (at her request, mind you), claimed that Robinson’s removal was due to the fact that former board co-chair Josh Seefried was jealous that Robinson was getting more media attention than he.  (Seefried also was alleged to have headed the now-debunked “anti-trans conspiracy.”)

Here’s Fulton, yesterday:

Sue-Fulton-SLDN

As a result of the ongoing attacks from Fulton and others, and in an effort to calm things down, Seefried resigned from the board this past Monday.  We now know that something much bigger than Josh Seefried’s alleged ego was going on behind the scenes at OutServe-SLDN.  Namely, the organization was in a financial meltdown, and it had been going on for months.

We now know that OutServe-SLDN is bankrupt

To some degree, this news was not surprising.  I reported over two weeks ago on the fact that OutServe-SLDN’s Chief Financial Officer Francisco Ramirez quit in May.  Ramirez issued a letter praising the board, and two past executive directors, but did not mention current ED Robinson, which was odd.  We also learned that the Treasurer of the board of directors, Tom Clark, resigned in April, and that development director (the man in charge of fundraising) David Hall stepped down in March.  It didn’t take Edward Snowden to guess that something might be amiss financially at the organization.

Francisco-RamirezJust how amiss, we now know.  According to board chair Heinze’s email, from January 1, 2013 to June 1, 2013, OutServe-SLDN fell $300,000 short of where it should have been financially.  As a result, over the past two months the organization was forced to borrow from the bank to pay for all of its day-to-day expenses such as staff salaries.  In the past, the line of credit from the bank was usually only tapped for exceptional one-time costs, such as paying for the venue for the annual dinner.  It was not tapped to pay for virtually 100% of the organization’s operating expenses.  The past two months it was, because of the $300,000 budget shortfall.

Even more troubling, Heinze reveals that OutServe-SLDN had a $150,000 line of credit from the bank – meaning, they could borrow up to $150,000, when needed.  But for some reason, the bank froze the line of credit when the organization had “only” borrowed $115,000.  That means that the bank was concerned about OutServe-SLDN’s finances, and its ability to repay the debt, so they stopped lending it money.  It also meant that an organization that was relying nearly 100% on bank loans to pay its operating expenses had now been cut off by the bank.

And that means you’re essentially bankrupt and out of business.

Occam’s Razor

We’re now presented with a choice.  Did the OutServe-SLDN board of directors consider removing Executive Director Allyson Robinson because:

  1. Board co-chair Josh Seefried is anti-trans; or
  2. Board co-chair Josh Seefried is jealous that ED Robinson’s name gets in the papers so much; or
  3. The organization went bankrupt and had to close its doors under her tenure.

I’ll let you figure that one out for yourselves.

Victims of their own success

We still don’t know enough of who did what to lead OutServe-SLDN into bankruptcy, but it’s clear the organization had problems.

If I were prone to conspiracy theories, I’d find it curious that former board co-chair Josh Seefried was the target of such ire from now-former ED Robinson’s defenders, when Seefried’s day job is basically serving as an accountant to the US military. In other words, he’s a numbers guy.  He knows the books best.  Who better to get rid of if you’re concerned about people finding out that there’s a brewing financial problem?  But, as I said, I don’t like conspiracy theories.

April-Heinze

OutServe-SLDN board chair April Heinze.

To some degree, OutServe-SLDN was a victim of its own success (though I seriously doubt that that’s the entire story here, or the board wouldn’t have tried to fire Robinson).  Still, it’s difficult to run a “gays in the military” organization after gays are now openly in the military.

We won.

And while the job is not over – there are no regulations specifically barring discrimination in the military based on sexual orientation, and trans service members are still not permitted to serve openly – neither issue appears to inflame the passions of the community as much as the repeal of Don’t Ask, Don’t Tell.  And Don’t Ask, Don’t Tell is now gone.  And the community has moved on to marriage, and ENDA.

OutServe-SLDN had to change as an organization.  The bankruptcy simply ensured that the change was more abrupt, and uglier, than perhaps one might have hoped.

Board Chair April Heinze’s email

Here is OutServe-SLDN board chair April Heinze’s full email to the Military Advisory Council last night:

To our dedicated members of the MAC:

We first want to apologize for our silence the past few days and weeks. We are overdue updating the MAC on the status of OutServe-SLDN, for that we apologize. Due to non-disclosure agreements and the time spent managing the evolving situation, we were not fully able to communicate with all of you as we would have wanted.

The Situation.

The situation is bluntly that the organization was out of money and could not afford to maintain staff and infrastructure. The organization’s assets declined $300,000 from January 1st to June 1st. Two months ago, the organization began to operate on a $150,000 line of credit which became frozen at $115,000, which meant we no longer could draw upon the bank’s line of credit to operate. Over the past two weeks, we have begun to shut down all unnecessary expenses and are negotiating loan repayment with the bank.

We will be completely honest, tomorrow, we are short nearly $2,400 to pay the remaining staff.

Over the next 12-18 months, the organization will be focused on paying down accrued debts, with our negotiations with the bank. As finances allow and likely at least a year away, the organization could rebuilt some functions in the realm of advocacy, development, or other support. Until then, the board becomes a working board–likely with additional actively serving members added to its ranks before the end of the month. We do believe we can rebuild financial stability in the organization.

Implications for the Staff, Office & Membership

  • Allyson Robinson’s resignation is effective tomorrow, July 12th.
  • The organization will continue as a membership organization for actively serving, veterans, and DoD civilians.
  • The office will by closed effective 31 July. The three remaining months of the lease are under negotiation and we will only have to pay for months the office remains empty (without a new tenant).
  • Meanwhile, board member Jonathan Hopkins is helping oversee the orderly closeout of our physical offices as well as managing other functions from DC.
  • The Legal Services function–as already announced–will no longer be internally handled. Select law firms have stepped up to outsource record correction requests and other legal issues
  • The Network and website will remain in place to keep servicemembers informed, connected, and supported.

Longer-Term Strategy.

The organization will transition to be more of a membership organization that still provides a network of social support for servicemembers, and also provides voice to those who still cannot speak honestly due to DoD regulations unfairly affecting transgender servicemembers. The cornerstone of OutServe-SLDN are it’s members. Therefore, the national leadership conference is expected to go as planned, which is especially important given its role in strengthening the network and developing our members. It also offers the only realistic chance of fundraising for the organization in the medium term to help pay down accrued debts. To manifest that transition at every level, the Board of Directors will also evolve, with the addition of new members including many actively serving over the next couple weeks. A Transition Committee made up of current Board Members and Chapter Leader representatives is working now on new Board nominations and ideas for the next phase of the organization. The conference will be a critical component in October as we, servicemembers, veterans and allies can be together in the same room to talk longer term strategy to rebuild the organization.

What We Need From You:

Your continued support. The mission of supporting servicemembers remains. Continue to tell the story of the power of this organization to connect others, empower them, and grow examples of leadership for the military and the LGBT Community.

Why does this matter? It’s just as Aubrey Sarvis used to say so often: “It’s for the Servicemembers.” And it’s the truth.

Thank you for your dedication, care and concern, and thank you for reading all of this. Please refer any questions to myself or Jonathan Hopkins at 360-957-5468. We want to keep you informed, and now more than ever need your continued support so the next evolution of OutServe-SLDN continues to meet the needs of our servicemembers.

Most importantly we want to say Thank You to the dedicated staff members who have remained. They have been incredibly helpful, professional and amazing through this difficult time.

April Heinze
Chair, OS-SLDN Board of Directors


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Instagram | Google+ | LinkedIn. John Aravosis is the Executive Editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown; and has worked in the US Senate, World Bank, Children's Defense Fund, the United Nations Development Programme, and as a stringer for the Economist. He is a frequent TV pundit, having appeared on the O'Reilly Factor, Hardball, World News Tonight, Nightline, AM Joy & Reliable Sources, among others. John lives in Washington, DC. .

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